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DAX 40 Market Update

3/8/2023 1:01 PM

The leading index of the Frankfurt Stock Exchange DAX 40 is correcting, trading at around 15530.0.

The German stock market is trying to win back yesterday's decline, which was largely caused by the extremely aggressive rhetoric of the US Federal Reserve regarding the increase in interest rates. The Chair of the regulator, Jerome Powell, signaled to the market that the value will continue to increase, putting pressure on stock assets around the world. Investors in the EU also took these statements negatively, because the "hawkish" rhetoric in the US is almost guaranteed to lead to a tightening of the monetary policy of the European Central Bank (ECB).

Another factor putting pressure on the German stock market remains the domestic bond market, which is still trading at highs. The rate of return on 10-year bonds is kept at the level of 2.710%, which significantly exceeds the previous peak of the end of December at 2.553%, and on 20-year bonds at 2.718%, which exceeds the December values of 2.623%. In turn, the yield of short-term bonds reacted most noticeably to yesterday's events in the US, rising overnight from 2.699% to 2.877%.

The growth leaders in the index are Covestro AG (+1.64%), Daimler Truck Holding AG (+0.89%), Siemens AG Class N (+0.34%), Porsche Automobil Holding SE (+0.31%).

Among the leaders of the decline are Vonovia SE (-5.63%), Fresenius Medical Care (-3.70%), Zalando SE (-3.37%).

On the daily chart, the price is trading in an uptrend, holding within the local ascending corridor with dynamic boundaries of 16600.0–15300.0.

Technical indicators are holding a buy signal, which is gradually weakening: the fast EMAs of the Alligator indicator are way above the signal line, and the AO histogram, being in the buy zone, is forming corrective bars.

Support levels: 15300.0, 14900.0. | Resistance levels: 15660.0, 16100.0.

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